E&C deal volume and average deal value increased in Q3 but continued to lag behind the overall US deals activity, which had recovered to pre-COVID-19 levels. Macro headwinds in oil & gas and commercial real estate -- impacted by the uncertainty surrounding the second wave of COVID-19 cases -- are likely to overshadow the potential bright spots in infrastructure and residential construction. The overall sector is poised to contract in 2020 with recovery expected by 2022.
PwC's Deals Sector Leader John Potter discusses the trends driving deals and outlook for 2021.
PwC's Deals Sector Leader John Potter discusses the trends driving deals and outlook for 2021. Explore national deals trends.
While construction activities have, for the most part, been allowed to carry on, an anticipated second wave of lockdowns is likely to slow the recovery of the E&C sector deal volume.
Low interest rates and government support for increasing investment in infrastructure could lead to an accelerated recovery of the infrastructure segment. In addition, technology driven innovations, increased margin pressures, and the changes in lifestyle and work -style preferences of workers globally will likely fuel M&A opportunities in certain construction segments.
“The ability to make investments in technology driven innovations to take advantage of changing market dynamics will be a critical factor in determining the winners and losers during the recovery and beyond.”